Clark Brownscombe - Chartered Accountants, Registered Auditors, Tax Consultants, Business Advisors Clark Brownscombe - Chartered Accountants, Registered Auditors, Tax Consultants, Business Advisors
Chartered Accountants, Registered Auditors, Tax Consultants, Business Advisors

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Friday, 18th April 2014



We are now starting to find out the level of cuts for different areas of Government expenditure.  The cuts will undoubtedly have a significant impact on many charities.


The Charity Commission are expecting to have to make savings of 33% in real terms over the next four years.  This will result in reduced staffing and services; the possibility has also been raised of charities having to pay for certain services from the Charity Commission.  The Charity Commission is planning to have all their services online only by 2012.


You may find the following resources helpful if you are facing such challenges:


1.        Working with other charities – a list of guidance on collaboration and mergers.


2.        Strength in Numbers (RS24) - Small charities experience of working together.


Charity Finance Audit Survey


The results of the annual Charity Finance Audit Survey have just been released.


We are delighted to be included again in their top 40 UK charity auditors; we are even more delighted that all our clients who completed the survey ranked us 100% for charity expertise, commitment to the voluntary sector and overall service.


Thank you to those who completed the survey and we shall continue to work hard to meet those levels of service.







Charity Commission Newsletter


This is now only produced as on online version.  All charity trustees and managers should ensure they receive and read Charity Commission News.  If you don’t already receive it, you can sign up at:


Equality Act


This Act (effective 1 October 2010) recognises that some charities are set up to help particular groups in society because they are disadvantaged or in order to meet clear social objectives.  In these circumstances, the law therefore permits charities to depart from the general principal of equal treatment. However, charities need to take care that any restrictions are those permitted under the Act and must ensure that such restrictions do not conflict with the Public Benefit rules.  For more guidance see:


Revised and New Guidance   


The Charity Commission have updated their guidance on Charities and Risk Management (CC26), Financial Difficulties and Insolvency (CC12), Charities and Reserves (CC19) and Internal Financial Controls (CC8).  All found at:


New resources are available for small charities and for anyone considering setting up a small charity.  For a very clear list of what is available go to:


Other new and revised guidance has been issued:


1.        Changes to the Regulation of Excepted and Exempt Charities – guidance on the implementation of the changes to these charities arising from the Charities Act 2006.


2.        Charities and Fundraising (CC20) – updated guidance.


3.        Faith based Charities - various guidance for religious Charities.


Public Benefit


Reports have been published on the public benefit of four arts charities.  All four have passed the public benefit test.


Good Governance


An updated version has been issued of Good Governance: A Code for the Voluntary and Community Sector.  We strongly recommend that all trustees read at least the summarised version and that all boards review the six principles and the specific application of them at a trustees’ meeting in the near future.





Fit and Proper Persons


Under the Finance Act 2010 in order to satisfy the ‘management condition’ and obtain or retain charitable tax benefits, a charity’s managers must be ‘fit and proper’ persons.


The term ‘managers’ will cover the trustees, other officials having day to day control over the running of the charity and any other persons who are able to exert direction or influence over the charity.  HMRC tend to regard ‘unfit’ people as those who have been involved in fraud or abuse of the repayment systems.


It is recommended that all new trustees read the basic guide and complete the model declaration found at:


Registering as a Charity with HM Revenue & Customs


Charities applying for tax exemption status or registering for Gift Aid for the first time must now complete form ChA1.  Amongst other things, the form asks for details on how the charity meets the Public Benefit requirement.




There has been some concern about the extra time, cost and complication of the requirement from 1 April 2011 for all Corporation Tax Returns to be filed with HM Revenue & Customs using iXBRL format.


HMRC have now indicated that smaller charities (those whose combined income including subsidiaries does not exceed £6.5million) will not have to use iXBRL format for filing until suitable free software is available.


Gift Aid


The next budget is likely to see some reform of Gift Aid.  The changes may simply be administrative but there is talk of altering tax relief for higher rate tax payers.


The current tax year to 5 April 2011 still allows higher rate taxpayers to obtain tax relief at their marginal tax rate on Gift Aid donations.  This gives them the possibility of relief not just at the 40% rate, but also at the 50% and 60% rates.  There is the potential, for example, of up to £1,281.05 being received by a charity for a cost of £500 to the donor.    


A further opportunity for higher rate taxpayers under current rules is the option to carry back Gift Aid payments to the previous tax year so long as their Tax Return for the previous year has not been submitted.




HMRC have revised their interpretation of the ‘solely’ requirement for zero-rating in the construction and acquisition of a building intended for relevant charitable use.  From 1 July 2010 the non-qualifying use percentage falls from 10% to 5% and there are certain other changes. 


 HMRC have also revised their policy in respect of pay-per-click charity advertising on sponsored links and other associated services.  They now accept that such links appearing on search engine websites are advertisements and qualify for zero-rating when supplied to a charity.  Charities that have overpaid VAT can submit a refund claim.





Apparently the new Charitable Incorporated Organisation structure will be launched early next year (by that we think early 2011, but for those of you who have been following the (lack of) progress on CIOs we seem to have heard that a few times before).


Independent Schools


The Charity Tribunal has been asked by the Attorney General to rule on what independent fee-paying schools may need to offer for the public or local community to continue their status as charities.  It will be some way into 2011 before we hear the outcome.


Employment Matters


The Church Urban Fund have produced an updated guide to employing staff in Faith-based-Projects.  You can download at:


Plans to require employers to compulsorily enrol their staff into a pension will start in 2012.  The largest employers will need to comply from 2012 but all employers will be in the scheme by 2016.  For the latest details see:


New Accounting Regime


The Accounting Standards Board will present a first draft of a new accounting regime for charities and other public benefit entities in the next month or so.  The focus will be on a number of more difficult areas for such organisations, for instance liabilities for multi-year grants.


It is expected that the ASB will support the continued existence of a SORP for Charities, based on the new standard.



Every care is taken in preparing this article, but readers are advised to seek professional advice before acting on any information contain